Regional rail funding announcement imminent

Regional rail funding announcement imminent as 'wall of wood' grows

By Pattrick Smellie

Feb. 21 (BusinessDesk) - Extra funding to bring the Napier-Wairoa railway line back into full-time service appears imminent, given signals yesterday from KiwiRail chief executive Peter Reidy and the announcement on Friday of the first projects to get support from the government's $1 billion a year regional development fund.

Regional Development Minister Shane Jones is expected to announce around $70 million worth of project funding at an event in Gisborne, with rail and other infrastructure expected to be part of the mix.

KiwiRail was invited to start running a weekend logging service between Wairoa and Napier in April last year, as a first step towards the possible reinstatement of the whole rail link between Gisborne and Napier, which was washed out north of Wairoa in storms in 2012.

However, the capital cost of bringing the Wairoa section back into service proved greater than expected, Reidy told BusinessDesk.

Now, however, an alliance between the Port of Napier, Hawke's Bay Regional Council and KiwiRail means an announcement on reopening the line, with potential to become a week-day service, is live.

"In Napier, we've done a tripartite thing between HBRC, Napier port and ourselves and there'll be an announcement, I think this week around that," said Reidy. "To go to a week-day service we'd have to invest in new assets. If the forestry companies and the regional council are willing to keep investing in the line, we'd be willing to put some more flatbed wagons on it and operate a five day a week service. That's the goal."

However, that would only be the first leg of a wider plan for national rail upgrades and extensions, with Reidy now publicly discussing the potential to justify a new railway line from Whangarei to Marsden Point with growth in log exports through NorthPort as well as discussions with Port of Taranaki and Invercargill's SouthPort to increase the use of rail to ship logs to port.

The Marsden Point rail extension and the reinstatement of commercial services between Auckland and Whangarei is a key plank of the New Zealand First party's regional development policy, which is in turn a key part of the party's plans to make its mark in the Labour-led coalition government.

Reidy said KiwiRail was experiencing its strongest growth in log volumes from forests located more than 75 kilometres away from a port. Any closer, and trucks are more competitive.

"Outside a 75km radius, we compete with trucks," said Reidy, noting that some of the proposals would see investment for growth in the rail network for many years, instead of just maintenance.

However, he was less bullish about the potential to reopen the Wairoa-Gisborne connection. Even though Gisborne is the country's second largest log export port, substantial investment would be required to bring the damaged line back into service.

"We haven't put anything up yet in terms of upgrade, but if we get to Wairoa, who knows what the government might like to do in terms of any development," he said.

(BusinessDesk)

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